The Relationship Between Open Innovation, Entrepreneurship,
8.2 The Relation Among Three Factors
8.2.1 The Relationship Between Open Innovation and Introduction of a New Business Model
Innovative performance resulting from an enterprise’s open innovation can be cat- egorized into three types: products new to the world market, products new to the enterprise, and significantly improved products for the own firms (Laursen and Salter 2006). Open innovation channels—such as cooperation among Chinese SMEs, cooperation with intermediary institutions, and cooperation with research organizations—have been shown to have positive effects on innovation perfor- mance, such as the annual turnover of new products or the innovation index (Zeng et al. 2009). Similarly, collaboration with partners in the value chain (customers or suppliers) provides a strong base for the incremental improvement of existing prod- ucts and services, whereas collaboration with academic institutions increases the ability of enterprises to drive radical new product development, due to access to new technologies (Parida et al. 2012). With the exception of analyses of individual open innovation cases, most open innovation studies, like the cases above, analyze how much the results of open innovation affected the introduction of new products, which is typically reflected as sales or the proportion of sales.
The introduction of a new business model indicates new products and new ser- vices such as A in Fig. 8.1. In other words, the measures of performance of open innovation through the interviews were the presence, degree, and frequency of new business model introduction and the qualitative aspects of new product introduction.
8.2.2 The Relationship Between Entrepreneurship and Open Innovation
The entrepreneurship fuzzy set has three dimensions in the market sector: organiza- tion creation, economic innovation, and profit seeking (Hornaday 1992; Kim and Jung 2015). Among these, organization creation and economic innovation are asso- ciated with the organizational behavioral characteristics of enterprises related to open innovation. SME entrepreneurs have strong viewpoints about innovation, including that “innovation is anything that makes money; innovation comes from everyone; and innovation sources are everywhere” (Massa and Testa 2008, p. 409).
SMEs tend to consider strict rules to be obstacles to innovation and focus on the importance of research centers and universities and intermediaries that mediate technology and ideas. Schumpeterian entrepreneurs monitor developments in tech- nologies, products, and methods at home and abroad and contemplate how profit- able it would be to adapt or improve existing goods or methods or produce them less expensively (Phelps and Zoega 2009).
Conceiving of new products and new methods against the background of existing technologies and the accessible stock of past products and methods is generally the
8.2 The Relation Among Three Factors
contribution of entrepreneurs (Hayek 1978). In addition, this entrepreneurial orien- tation has moderating effects on the market orientation–performance linkage, according to evidence from Chinese small enterprises (Li et al. 2008). Open and networked innovation that is triggered by a creator with visionary leadership, such as entrepreneurship, is a process of exploration and exploitation of knowledge (Harryson 2008).
Entrepreneurship plays an important role in promoting open innovation. In fact, the distinctive appearance of entrepreneurship stimulates the system, equipment, and enterprise culture, laying the groundwork for the introduction of a larger degree of open innovation, such as Ba and Bb in Fig. 8.1.
8.2.3 The Relation Between Open Innovation and RIS or National Innovation System
An appealing attribute of clusters or RISs is that they can provide positive externali- ties to agglomerated enterprises because they are interconnected and would theo- retically encourage information and collaboration flows among members (Silvestre and Dalcol 2009; Marceau 1994). Within a cluster, the intensity of information and communication is observed through face-to-face contacts and the interactions of people and enterprises (Batheld et al. 2004).
However, because there is a severe asymmetry among clusters, depending upon their makeup and location, some locations or clusters in any industry or sector have more knowledge than others (Malmberg 2003). For example, the difference in pro- duction, distribution, and consumption among growing clusters may lead to a differ- ence among specific enterprises, such as Samsung Display Ltd. and Chimei Display Ltd. among Korean and Taiwan thin-film-transistor liquid-crystal display (TFT LCD) clusters (Yun et al. 2010). Differences between RISs and clusters cause an unequal distribution of knowledge within the economic system and lead to a differ- ence in regional knowledge capabilities and open innovation between an RIS and a
Fig. 8.1 The relation between entrepreneurship, open innovation, and business model (Source:
Yun et al. (2013) modified)
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cluster (Cooke 2005). A study that analyzed the Silicon Valley–Hsinchu Connection demonstrated that as a new cluster became affiliated with the Silicon Valley through the construction of a Taiwanese technical community there, the new cluster became successful due to an increase in the mobility of knowledge and capital (Saxenian and Hsu 2005). Another study found that, according to its regional innovation or regional embeddedness, the mode of knowledge sourcing of an enterprise can be changed (Kramer and Diez 2011).
In addition, there is a difference in mobility and existence of knowledge among regions beyond the boundaries of countries. Meanwhile, differences between national innovation systems, which would include “all important economic, social, political, organizational, institutional, and other factors that influence the develop- ment, diffusion, and use of innovation,” combined with differences among sectors, lead to a difference in the amount of knowledge, as well as the distribution or circu- lation speed of knowledge and information, and the commercialization pattern of knowledge between countries surrounding a specific sector (Lundvall 1992, p. 78).
The reason is that differences between national innovation systems reflect differ- ences in innovative capacity (Freeman 1987). Another study suggested that, accord- ing to different nations’ RISs, there will be differences in the intangible assets that act as drivers of innovation (Kramer et al. 2011). Those intangible assets are the amount, speed, or content of knowledge.
Differences between RISs, clusters, and national innovation systems cause dif- ferences in the amount of knowledge, as well as its distribution speed, within the relevant innovation system. They consequently induce overall differences among firms in belonging innovation system in terms of the open innovation effect (A), the direct effect of entrepreneurship to open innovation activity (Ba), and the indirect effect to open innovation results through moderating of open innovation (Bb).
8.2.4 The Relation Among Three Factors
Entrepreneurship normally has an indirect effect on the open innovation strategy of firms, such as Ba in Fig. 8.1. Through this, entrepreneurs let their firms increase or activate open innovation and thereby increase performance. But entrepreneurship and open innovation are different in terms of identity. Entrepreneurship is character- istics of the builder of big enterprises, SMEs, start-ups. In contrast open innovation is a kind of strategy employed by firms.
Open innovation motivates increased performance in a target firm. In the end, the increased performance of any firm that is motivated by open innovation introduces a new business model, such as Aa in Fig. 8.1.
The concrete relation among entrepreneurship, open innovation, and business model should be analyzed. It is possible that the concrete relations will be different among RIS, sectorial innovation system (SIS), and national innovation system.
8.2 The Relation Among Three Factors
8.3 Difference of Three Factors According to RISs